BEIJING: China has agreed to $2.5 billion (R19.9bn) in investment projects with South Africa, Deputy President Kgalema Motlanthe has said during a three-day trip to China during which he brushed off controversy over a potential visit by the Dalai Lama.

Motlanthe said yesterday that the agreement had been made between the Development Bank of South Africa and China Development Bank, and that the two countries had also signed a memorandum of understanding on “geology and mineral resources”.

South Africa exports about $5.5bn a year in minerals to China, and Africa’s largest economy has increasingly been a destination for Chinese foreign direct investment. Motlanthe provided few details on the investment plans.

“This financial co-operation agreement is between development banks and the specific projects in which they are going to invest. They still have to identify these projects.”

Motlanthe said the deals were intended to “strike a healthy balance” in trade volume between the two countries.

“To that end, the difference is, instead of just exporting these minerals as raw materials, there will be… value add to create jobs on both sides.”

Motlanthe is due to have a meeting with China’s President Hu Jintao today.

Last year China invited South Africa to join the Bric (Brazil, Russia, India, China) grouping, a diplomatic coup for President Jacob Zuma. It was seen by analysts as a Chinese stamp of approval for the country’s role as a stepping stone to the African continent.

Motlanthe’s trip has been slightly overshadowed by a potential visit to South Africa by exiled Tibetan spiritual leader the Dalai Lama, a man China reviles as a separatist and whom it repeatedly warns other countries not to receive.

South Africa has not yet decided whether to allow a visit by the Nobel Peace laureate, who was invited by Archbishop Desmond Tutu to attend his 80th birthday celebration in early October.

The Dalai Lama, embraced as a beacon of peace in South Africa when apartheid ended, has become a diplomatic headache for the country as its economic fortunes are increasingly linked to China.

Tutu said the manner in which the visa application had been dealt with was reminiscent of the way the authorities had dealt with applications by black South Africans for travel under apartheid.

“It would have been much more respectful to have received a negative answer than no answer at all,” said Nomfudo Walaza, chief executive officer of the Desmond Tutu Foundation.

Motlanthe made it clear that his visit to China, which included a meeting with China’s Vice-President Xi Jinping, was aimed at bolstering economic ties, deflecting questions about the exiled Lama. – Reuters